Zerowait is an international 3rd party provider of Parts, Services, and Support for Network Appliance equipment and the developer of SimplStor and SimplStor EVS.
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Friday, June 29, 2007

Many years ago when we were a succesful reseller and RSP for NetApp we introduced a large brokerage firm and mutual fund company to NetApp's technology. We made an appointment with the NetApp folks in Sunnyvale and the District Representative from the DC area met us in Sunnyvale at the new NetApp buildings & conference center. The CTO from the company we were introducing to the new technology wanted a strategic partner, and at the time NetApp was the new kid on the block. So after the meetings in California, it still took many months of missionary sales work to show the customer that NAS was a really good way to go for his storage, and Zerowait was going to be around for a long time supporting the equipment.

As time went by the customer was getting more interested in trying and buying the equipment and as it was a very big customer, we had a bunch of mutual meetings with the customer and our engineers and some NetApp folks.

As the deal got very close to closing, NetApp decided that we could not sell in that area anymore and took the customer direct. This customer is now one of NetApp's largest eastern customers and NetApp gives them very good service and from what I understand astonishingly good price discounts.

Like so many other customers we introduced to the technology they fell in love with NetApp's simplicity, but as time has gone by this cusotmer, like so many others, is wondering if there may be a way of extending their product life cycles beyond what the vendor sales force requires to keep their sales numbers up.

And so we are chatting with them again, 6 years isn't so long in the life of a growing business.

Tuesday, June 26, 2007

Has Looney Tunes moved to Java Drive in Silly Con Valley?

Yesterday evening I was discussing NetApp's cartoon customer characterizations with a couple of our mutual customers. We provide monitoring, maintenance and management of these customers filers after they buy them from NetApp. What really pissed these folks off was the way NetApp is taking away Command Line Interface, and then boasting about it, as an idea concocted by their cartoon characters. I had missed this when I read the article yesterday, because I was laughing so hard, but the engineer pointed it our to me while we were drinking a beer at Iron Hill Brewery.

I know that our engineers think that taking away NetApp's CLI seems like a pretty boneheaded idea . We think our storage customers are pretty smart folks, which is why we talk to them and visit them as often as we can. Customers want the most value they can get for their storage dollar. Can a company as large as NetApp really be this out of touch with its customers?

Which cartoon character came up with the idea of handicapping their new FAS2020 with only 1TB of memory?You just can't make this stuff up!

Monday, June 25, 2007

Many of our NetApp service and support customers come to us because they have heard from coworkers and peers that Zerowait can help them control their maintenance costs, and then they learn about our remote management and other services that can help them control their out of control maintenance and upgrade costs for their NetApp equipment.

Recently, I heard from a customer in NYC that their NetApp SE was strongly suggesting they upgrade to a newer system. As I asked some questions I found out that their current hardware was not maxed out in anyway and could easily handle more, users, disks, and shelves. The customer learned that the SE was truly a Sales Engineer. Sales is the first word in that title, and they are not looking out for the customer's long term interest, but instead NetApp SE's are trying to sell you more equipment to boost their personal bonuses.

Can a vendor's Sales Engineer ever put the customer first? It is an interesting question that needs to be asked. I think the answer is that an independent maintenance organization is the only way for a NetApp customer to get the most value in performance and long term usage out of his equipment. NetApp sells boxes and software, not efficiency.

Instead of asking customers what is in the customers interest and building products for them, NetApp has embarked on building Avatars of their perfect customers, so that they can build perfect products for them.

So now NetApp has created cartoon characters to act as their perfect customers... You just can't make this stuff up!

At Zerowait we listen to real customers, and their real problems, and provide real solutions. We invest our research and development funds in creating better ways to help our customers, while NetApp is investing in cartoon characters to help their customers.

It is worth reading the whole article, but clearly there was something funny going on. It certainly doesn't look like the management had the long term interests of their customers, investors, or employees in mind. Are these statements representative of how the management was trying to build the company, or just on how they were trying to cash in quickly for themselves?

Thursday, June 21, 2007

What happened to selling the 'Magic' of NetApp? It seems they are resorting to competing only on price now. Somehow - I don't think NetApp can compete in the commodity storage business, they have a high cost support and maintenance model.Their sales strategy seems broken, it looks like they are fighting for the high margin business with EMC , and also fighting for the low margin business now with companies that are built to sell commodity priced equipment. Salesman go where the commission dollars are. Low margin typically means low commission. And saleman always work harder for a good commission.

Can a company used to high margin sales and expensive technical support compete in the commodity storage business? Most companies are not succesful when they try to drastically switch their sales model. Maybe CDW can sell a bunch of storevaults at a low margin and NetApp can make it up on volume? Companies have tried this tactic in the past.

Wednesday, June 20, 2007

"To see what is in front of one's nose needs a constant struggle." George Orwell .If you think your data is important and a corporate asset, defending your network is as important as the security of your storage.

However the firewall folks and anti spam folks don't seem to be working with the data storage encryption folks, I wonder why that is? Instead of creating a secure unified network and storage infrastructure we seem to be creating environments made up of a hodgepodge of different solutions that have not been tested together. Every company tries to put together a solution based on marketing information and sales presentations that neglect to mention that each vendor has their own security patches that you have to purchase and update regularly. Every implementation ends up unique because no two networks have the same releases of software on all of their defensive hardware and software. And no one has ever tested all of the releases in your situation before.

The DoD is increasing its budget and still they admit they are insecure....

What can a business do to defend itself? What business has the budget of the Defense department? Network Security, Data Security, with limited resources you are vulnerable to atttack, and with almost unlimited resources the DoD is still vulnerable to attack. So what vulnerability do you try to solve today with your available resources?

2) I learned this weekend that the NetApp FAS3020 will be End Of Lifed (EOL) by the end of the year.

3) I have heard that the new FAS2020 has only 1 Gig of memory. That is odd, why not put more memory on the system NetApp?

4) I also heard good things about Equallogic last week, sounds like NetApp is keeping an eye on them, especially in the PACS area. Maybe the healthcare industry is waking up to the fact that a Seagate drive is pretty reliable and NetApp charges too much for them?

I am very sorry that you are no longer a NetApp customer. If youwouldn't mind sharing with me, what vendor / product solution did youchoose to replace your F740, and why did you choose that solution overNetApp (especially since it sounds like you were happy with both theproduct and the support).

Well, it is with deep regret that I bid all you toasters a fondfarewell. I'd like to say that I appreciate all the help during thetime that our 740 served us for about 8 years. The 740 was a finedevice and NetApps support was top-notch. After a very lengthydiscussion over several months, we went to another storage solution.By the way, if anyone is interested in the 740 maxxed at 1TB raw andincludes a spares kit with motherboard and misc other parts that werenever used, send me an email. It is located in the Southern Indianaarea. First come, first serve. You have to arrange for transport. IfI don't hear anything from anyone by the end of the week, it's going tothe recycler. Thanks again to all.

If people concentrated on the really important things in life, there'dbe a shortage of fishing poles. - Doug Larson

When I corresponded with the former NetApp customer yesterday I found that one of the main reasons for his departure from NetApp's products was the cost of maintenance and support. Like so many NetApp customers he was looking for an affordable alternative to NetApp's maintenance and upgrade policies. His email's last sentence to me yesterday ended with "Maintenance costs played into it as well."

Tuesday, June 12, 2007

How long can IBM stay in a low profit business sector? .

NetApp is very proud of its reseller relationship with IBM. And many of our customers have been able to get better deals by getting quotes on identical equipment from both IBM and NetApp. But I always figured it was going to be hard for IBM to make money on reselling NetApp equipment. Therefore when I saw this article in Today's Wall Street Journal I was not very surprised.

Will IBM continue to resell NetApp equipment even though it has narrow margins on the resale and service of the equipment? Will they be able to force concessions out of NetApp to get their margins higher? If IBM is able to get bigger margins out of NetApp will the result be lower profits for NetApp?

It seems that some folks are learning from history, NetApp has squandered its relationships with the channel over the last ten years, it is hard to build a loyal channel with their record. And perhaps George Bernard Shaw was wrong - Business people do learn from history when it hits their wallets.

Wednesday, June 06, 2007

If you can't describe what you are doing as a process, you don't know what you are doing. - W. Edwards Deming .

In my college years working on my business degree I studied production and inventory control methods. A few of the courses, and some of the better professors, took the time to explain that Deming was right about quality, but quality is also about relationships and how you deal with customers, vendors and other business partners. I learned in college and it has been reinforced in my almost 20 years in business that developing a process for quality control of a product is a lot easier than developing a process that helps to reinforce our many faceted business relationships.

What we learned was that Deming understood that quality was not just statistical sampling, it was also the understanding of the how and why you build your product or deliver your service, and how you maintain that diligence over time. Creating long term customer loyalty for your company and your product or service is not going to be based on price. In business long term relationship are the key ingredient to building a strong company, and it costs time and money to develop these strong relationships. So when companies stress that they are putting on a sales promotion, or going to beat out the competition for more business I have to ask myself " is their new business going to be profitable over the long term, or just going to push up their units sold numbers?" If the sales are not profitable for the vendor, eventually business forces will force the vendor to provide less service and support per unit.

Deming taught that “Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them.” This model seems to be working for Zerowait.

NetApp makes a substantial amount of its profits from selling Seagate hard disks and Xyratex storage shelves, obviously if NetApp's salesman are going to give up the sales of disk and shelves they are going to lose some commission. And most sales folks don't like to give up their commission to a competitors products. So how will NetApp - which is a hardware sales company going to make up the lost sales opportunities from this deal for its salesman?

Will this be a good opportunity for the 3PAR sales force? It gives them some gravitas, but how can working with a competitor be good for either sales force? A look back will show that NetApp does not play well with past partner companies like Dell, Hitachi and so many others. So it looks like they are taking Sun Tzu's advice and keeping an eye on their enemy.

Monday, June 04, 2007

If you want to understand today, you have to search yesterday. ~Pearl Buck

NetApp has recently put on a push to engage the channel to help it ramp up NetApp's anemic sales numbers. In the past, NetApp has used the channel as a missionary sales force and then abruptly pulled the best accounts for themselves, leaving the channel with the sales & market development costs, while taking the profits directly. Eventually the good storage channel companies get wise to this tactic, and don't do business with folks engaged in this type of strategy.

It seems to me that the stakeholders in this settlement are being hurt in a few ways.* The executives of companies in this scandal have squandered their 'trust' realtionship with their employees in this effort to pad their own wallets.* Companies that lose their employees and customers trust end up hurting the stockholders, because it becomes harder to sell their 'value' to their customers when there is a taint of scandal. A harder sale is a less profitable sale, and it is hard to sell when your executives may be crooks.* Employees may exhibit discomfort when working with customers who ask about the scandal and what the long term effect on their company & the executive staff might be. Are the executives going to be forced out? What is the transition plan?

As a consumer of technology products, I prefer to deal with companies and executives that take a long term view of their company's and products' value. Why should we trust that companies and executives that focus on short term personal gains will create products and support that provide long term value and return on investment? If corporate executives are looking at short term personal profits, will they be concerned with your long range plans? Options scandals have the taint of short term fast buck thinking, not long term value.